Corporate governance has become an important issue for Chinese and Indian firms as they increasingly interact with regulators and investors from developed markets. For instance, tapping into global capital markets to raise funds to finance their domestic and international growth requires firms from China and India to demonstrate strong corporate governance credentials, so that investors do not discount their stock (LaPorta, Lopez-de-Silanes, Shleifer, & Vishny, 2000). The swift action of Chinese and Indian authorities in response to recent corporate scandals – such as the one at Satyam Computers – reveals that even governments in emerging countries such as China and India see the need to promote good corporate governance to ensure the inflow of capital and the outflow of products. Furthermore, understanding corporate governance standards and issues in China and India is also important to executives of foreign multinationals doing business in these two countries.
Corporate governance is a recent concept that encompasses the costs caused by managerial misbehavior. Corporate governance is concerned with how organizations in general, and corporations in particular, produce value and how that value is distributed among the members of the corporation, its stakeholders. The interrelation of value production and value distribution links the ubiquitous technological aspect (the production of value) with the moral and ethical dimension (the distribution of value). Corporate governance is concerned with this link in general, but more specifically with the moral and ethical dimensions of distributing the generated value among the stakeholders. Value in firms is created by firm-specific investments, and the motivation and coordination of value enhancing activities and investment is protected by the power concentrated at the pyramidal top of the organization. In modern companies, it is the CEO and the top management deciding how to create value and how to distribute it among the relevant stakeholders. Due to asymmetric information and the imperfect nature of markets and contracts, adverse selection and moral hazard problems occur, where delegated (selected) managers could act in their own interest at the costs of other relevant stakeholders. Corporate governance is a two-tailed concept. The first aspect is about identifying the (most) relevant stakeholder(s), separating theory and practice into two different and conflicting streams: the stakeholder value approach and the shareholder value approach. The second aspect of the concept is about providing and analyzing different mechanisms, reducing the costs induced by moral hazard and adverse selection effects, and to balance out the motivation and coordination problems of the relevant stakeholders. Corporate governance is an interdisciplinary concept encompassing academic fields like finance, economics, accounting, law, taxation and psychology, among others. Like countries differ according to their institutions (i.e. legal and political systems, norms, and rules), firms differ according to their size, age, dominant shareholders or industries. Thus concepts in corporate governance differ along these dimensions as well. And while the underlying characteristics vary in time, continuously or as an exogenous shock, concepts in corporate governance are dynamic and static, offering a challenging field of interest for academics, policy makers and firm managers.
The following chapter identifies the meaning and main features of corporate governance, underlines the importance of an entity, which regulates and balances the interests of shareholders, stakeholders, and managers in order to realize a corporation's long-run goals. Currently, all models of corporate governance can be divided by their characteristics into three types: Anglo-American, German, and Japanese; each of these models has some unique elements that are required by a particular country. The process of forming and development of corporate governance in transitional economies are described as well. As the accuracy of corporate government influences the wiliness of investors to sink their capital, it is crucial to understand the methods of corporate governance efficiency evaluation by international rating agencies. Moreover, the example of Enron Corporation's failure shows the exceptional role of corporate governance in protecting and ensuring the rights of shareholders and stakeholders, solving the conflict between managers seeking higher bonuses and investors' goals on stable future return and potential growth.
This study describes the Indian corporate governance system and examines how the system has both supported and held back India's ascent to the top ranks of the world's economies. While on paper the country's legal system provides some of the best investor protection in the world, enforcement is a major problem with slow, over-burdened courts and significant corruption. Ownership remains concentrated and family business groups continue to be the dominant business model. There is significant pyramiding and tunneling among Indian business groups and, notwithstanding copious reporting requirements, evidence of earnings management. However, corporate governance in India does not compare unfavorably with any of the other major emerging economies: Brazil, China and Russia. India ranks high on the ease of getting credit, and has a well-functioning banking sector with one of the lowest proportions of nonperforming assets. The two main Stock Exchanges have among the highest number of trades in the world, and the relatively young Securities and Exchanges Board of India has a rigorous regulatory regime to ensure fairness, transparency and good practice. Most importantly, the corporate governance landscape in the country has been changing fast over the past decade, particularly with the enactment of Sarbanes-Oxley type measures and legal changes to improve the enforceability of creditor's rights. If this trend is maintained, India should have the quality of corporate governance necessary to sustain its impressive current growth rates.
This thesis is composed of three chapters. In the first chapter, I analyze the effect of change in product market competition on board composition and evaluate its consequences on firm performance. Using industry-specific exogenous changes in product market competition, I test whether firms respond to changes in the demand for board independence. I find that firms decrease their level of board independence by 5.52 percentage points in response to an increase in product market competition. Moreover, by exploiting the 2003 NYSE and NASDAQ rulings in a triple-difference design, I show that constraint on firm's ability to adjust its board structure in response to changes in competition has negative consequences on its performance; firms which are constrained by the regulation to reduce their board independence experience a 10.5 percentage points lower return on assets (ROA) compared to unconstrained firms. This suggests that the decrease in board independence is in the interest of shareholders. By showing that regulation may actually harm some firms, the analysis sheds light on the costs of "one size fits all" governance regulations. In the second chapter, I shed light on the political ideology of the CEO as an important determinant of firm performance. Using individual campaign contribution data, I measure the political ideology of U.S. CEOs over the period 1994 to 2014 and analyze the relation between CEO ideology and firm performance. To identify the causal effect of CEO ideology, I use a combination of time-varying effects and novel instruments based on the ideology of the pool of potential CEO hires. Across all specifications, I find that firms with Republican CEOs, on average, 6 percentage point higher ROA compared to firms with Democrat CEOs. Several alternate explanations such as time varying differences at state-industry level, political connections and firm fixed effects do not explain away the results. In the third chapter, joint work with Antonio Vazquez Lopez (UC3M), we test whether focal firms whose CEOs sit on multiple boards can suffer decreases in performance due to transient attention-grabbing events in firms where CEOs sit as independent directors. We exploit extreme returns (positive and negative), extreme earnings and extreme volatility in firms where CEOs sit as independent directors and find that such distraction leads to an average decrease of approximately 1% of focal firm's ROA, Q, market returns and ROE. This effect is stronger for focal firms that are geographically more distant to firms where CEOs sit as independent directors, which suggests that distraction is costlier in such situations. Additionally, we show that distraction is greater for CEOs that sit on the audit committee or chair a major sub-committee. Finally, we show that these distraction events also lead to lower CEO compensation and higher probability of forced turnover. ; Programa de Doctorado en Empresa y Finanzas / Business and Finance por la Universidad Carlos III de Madrid ; Presidente: Andrés Almazán; Secretario: Pedro Gete; Vocal: Miguel Antón
Corporate Governance in Bosnien und HerzegowinaIm Laufe der Zeit ist die Corporate Governance weltweit eine Selbstverständlichkeit geworden. Allerdings, hat die Regierung in Bosnien und Herzegowina bis jetzt die Einführung der Corporate Governance unterlassen. Dies führte zur erfolglosen Privatisierungen und weiters zur Unterschätzung und Zerstörung vieler Unternehmen. Infolgedessen ist das Vorhandensein der Corporate Governance von großer Bedeutung für B-H sowohl für private als auch für die übrigen großen staatlichen Unternehmen. Ziel dieser Arbeit war, sowohl die allgemeine Bedeutung der Corporate Governance als auch die spezifischen Aspekte unter bosnisch-herzegowinischen Besonderheiten darzulegen.Auf Grund der Komplexität der Corporate Governance wurden die Lage der Minderheitsaktionäre und das Corporate Reporting unter Berücksichtigung der institutionellen Rahmenbedingungen in B-H dargestellt. 78% der börsennotierten Unternehmen in B-H werden durch Mehrheitsaktionäre kontrolliert, die die Minderheitsaktionäre trotz gesetzlichen Rahmenbedingungen gefährden können. Nicht außer Acht zu lassen, sind die Erfahrungen der zuständigen Institutionen über das Corporate Reporting, die die geringe Einhaltung der Transparenzanforderungen in B-H bestätigen. Die offen gelegten Informationen dürfen seitens der Investoren nicht immer als verlässlich interpretiert werden. Die Analyse bestätigt, dass rechtliche Rahmenbedingungen für Corporate Governance in B-H existieren. Die Durchsetzung und Anwendung der Gesetze ist jedoch inadäquat. Die Corporate Governance in B-H befindet sich in der Eintrittsphase. Die begonnenen Reformen müssen fortgesetzt und die Bedeutung der Corporate Governance aufgeklärt werden. Dies bezieht sich insbesondere auf die Transparenz, die die bosnisch-herzegowinischen Unternehmen für potenzielle Investoren attraktiver machen würde. Um die Fortschritte diesbezüglich zu erleichtern, ist die konsequente Staatspolitik jedoch entscheidend. ; Corporate Governance in Bosnia and HerzegovinaOver the time, the Corporate Governance has become a necessary part of the bussines world. However, the government of Bosnia and Herzegovina has avoided to introduce the system of corporate governance. This led to the unsuccessful privatization and further to the underestimations and destruction of many companies. For this reason, the existence of corporate governance is of great importance for both private and the remaining large state enterprises. The aim of this work was to present the general importance of corporate governance as well as the specific characteristics related to the Bosnia and Herzegovina. Due to the complexity of the topic the situation of the minority shareholders and corporate reporting has been researched under the consideration of the instutitonal environment in B-H. 78% of listed firms in B-H are controlled by the majority shareholders. Despite the legal framework they are able to compromise the status of the minority shareholders. Further more, the experience of the competent institutions regarding the corporate reporting confirms the low compliance with the transparency requirements by the firms in B-H. The disclosed information is often very useful, but should not always be taken as a reliable decision factor.Recent analysis revealed the existence of the legal framework for corporate governance in B-H. However, it contains numerous gaps, as the enforcement and application of the laws are inadequate. The corporate governance in B-H is still at the very beginning. The initiated reforms must be continued, and the importance of corporate governance should be enlightened. This refers in particular to the transparency that would make the Bosnian-Herzegovinian company more attractive to potential investors. To facilitate the progress in this field, the consistent state policy is fundamental. ; Nerma Halilovic ; Abweichender Titel laut Übersetzung der Verfasserin/des Verfassers ; Zsfassung in engl. Sprache ; Graz, Univ., Masterarb., 2010 ; (VLID)213412
Der Deutsche Corporate Governance Kodex (DCGK) entfaltet trotz seiner rechtlichen Unverbindlichkeit als sog. "Weiches Recht" oder "Soft Law" erhebliche tatsächliche Wirkungen. Für Vorstände und Aufsichtsräte bestehen starke Anreize zur Befolgung, vor allem, um damit einen positiven Signalling-Effekt zu erzielen. Umgekehrt kann die Nichtbefolgung insbesondere des Empfehlungsteils negative Konsequenzen haben, die restriktiv wirken. Die vom DCGK ausgehenden Anreize und Restriktionen fallen je stärker aus, desto mehr ein Unternehmen für die Kapitalbeschaffung auf die Kapitalmärkte angewiesen ist. Die Verpflichtung zur Abgabe einer Entsprechenserklärung nach § 161 AktG führt zu einer allgemeinen Bekanntheit des DCGK und verhilft zu dessen breiter Durchsetzung. Ferner kommt es durch sie zu einer Verstärkung der Regulierungswirkungen des Empfehlungsteils. Die Funktion von Corporate Governance Kodizes ist es, Standards zu setzen, an denen sich die Akteure des Kapitalmarkts orientieren können. Zur Regulierung durch Corporate Governance Kodizes sind drei Regelungsalternativen erkennbar: Regulierung durch Parlamentsgesetz, Listings Rules oder eine völlige Freigabe der entsprechenden Regelungsbereiche. Bei der schrittweisen Analyse von Soft Law, Corporate Governance Kodizes im Allgemeinen und dem DCGK als konkretem Anwendungsfall werden im Lichte der Regelungsalternativen einige Argumente herausgearbeitet, die für diese Regulierungstechnik sprechen. Dies sind mögliche Einsparungen von Transaktionskosten, Flexibilität und eine hohe Qualität des Normsetzungsprozesses. Regulierung durch Corporate Governance Kodizes erweist sich insofern den übrigen Regelungsvarianten als überlegen. Dies gilt insbesondere, wenn die Verpflichtung zur Abgabe einer Entsprechenserklärung nicht auf einen einzelnen Kodex beschränkt wird, so dass die Regelungsadressaten zwischen verschiedenen Kodizes wählen können ("Wettbewerb der Institutionen"). Ein Verstoß gegen den verfassungsrechtlichen Gesetzes- oder Parlamentsvorbehalt durch § 161 AktG ist nicht feststellbar. Bei der Anwendung des Instrumentariums der Konstitutionenökonomik zeigt sich jedoch, dass eine Verpflichtung zur Abgabe einer Entsprechenserklärung nur dann legitimiert ist, wenn diese hinsichtlich des in Bezug genommenen Kodex offen und nicht auf einen einzelnen Kodex beschränkt ist. ; Despite its unbinding legal character as "Soft Law", the German Corporate Governance Code has significant actual effects. There are strong incentives for members of the board of management and members of the supervisory board to comply with the code, mainly based on the opportunity to utilize a positive signalling-effect. Incentives and restrictions based on the code become the more significant, the more a company relies on capital markets for raising capital. Empiric studies confirm this hypothesis. The obligation to "comply-or-explain" in § 161 AktG generates a broad publicity and facilitates the general acceptance of the code. The regulatory effects of the code are being aggravated. Codes of Corporate Governance contribute to improving corporate governance structures by setting standards that capital market players can use for guidance and orientation. There are three alternatives to regulation by codes of corporate governance: regulation by law, regulation by listing rules and non-regulation. A step-by-step analysis of soft law, codes of corporate governance in general and the German Corporate Governance Code in particular brings upon a number of arguments in favour of this regulatory technique. These arguments are: savings in transaction costs, increased flexibility and a high quality of the standard-setting process. In this respect, regulation by Codes of Corporate Governance is superior to its regulatory alternatives. This is even more valid for an institutional setup where the obligation to "comply-or-explain" is not limited to a single Code of Corporate Governance, but leaves the addressees the choice among various competing codes. In such an institutional setup of "regulatory competition", companies are free to choose the regulatory regime that best fits their specific needs. Regarding German constitutional law, a breach of the rules of provision of legality ("Gesetzesvorbehalt") and provision of parliament ("Parlamentsvorbehalt") by § 161 AktG can not be proven. Applying constitutional economics, a legitimating consensus can be shown in respect to the actual compliance with a Code of Corporate Governance. However, the obligation to "comply-or-explain" can only be legitimated, if the obligation does not refer to a specific Code of Corporate Governance.
Die steigenden Bezüge von Vorstandsmitgliedern und die Krise der letzten Jahre haben die Vergütungspolitik börsennotierter Aktiengesellschaften zu einem Dauerthema in den Medien, aber auch in der Politik gemacht. Diese Arbeit beschäftigt sich mit der Vergütung von Vorstands- und Aufsichtsratsmitgliedern, zeigt dabei Probleme und Schwachstellen auf, geht aber auch auf Verbesserungs- und Lösungsmöglichkeiten ein. Der erste Teil beschreibt grob Ursprung und Zweck des Österreichischen Corporate Governance Kodex, der durch seine detaillierten Bestimmungen eine wichtige Rolle in Vergütungsfragen spielt. Das zweite Kapitel handelt von den wichtigen Rechtsakten der Gemeinschaft, die großen Einfluss auf die Entwicklung der Corporate Governance, speziell aber auf die Vergütungspolitik, hatten. Schwerpunkt der Arbeit bildet die Analyse der Organvergütung mit Erläuterungen zu Struktur, gesetzlichen Grundlagen und Erweiterungen bzw. Einschränkungen durch den Kodex, aber auch zur praktischen Anwendung dieser Vorgaben. Besonderes Augenmerk liegt dabei auf variablen Vergütungskomponenten, Aktienoptions- und Übertragungsprogrammen, der Problematik von Golden Handshakes sowie auf der Veröffentlichung vergütungsrelevanter Daten. Schließlich wird noch kurz die Situation in Deutschland angeschnitten, wo ein Großteil der Bestimmungen auf dem Bereich der Organvergütung nicht nur im Corporate Governance Kodex, sondern auch auf gesetzlicher Ebene geregelt ist. ; The increasing salaries of executive board directors and the recent financial crises have pointed the interests of politics and media towards the remuneration policy of quoted stock corporations. This paper focuses on the remuneration of executive and non-executive board directors, indicates problems and weaknesses, but also points at possible solutions and improvements. The first part roughly outlines origin and purpose of the Austrian Code of Corporate Governance, which plays an important role in remuneration issues due to its detailed regulations and recommendations. In the second chapter, the importance of acts of the European Commission as well as their substantial influence on the development of the Corporate Governance, and especially on the remuneration policy, is investigated. The main focus of this paper lies on the analysis of board compensations, which features descriptions of structure, legal principles with their enhancements and restrictions through the Code and practical applications of these regulations. Special emphasis is thereby placed on the variable remuneration elements, option and share based compensation, the troubles with golden handshakes as well as the disclosure of data relevant to these issues. Finally, the situation in Germany is touched, where the majority of regulations concerning remuneration issues is not only determined by the Corporate Governance Code but also on a legal level. ; von Thomas Schratter ; Abweichender Titel laut Übersetzung der Verfasserin/des Verfassers ; Graz, Univ., Dipl.-Arb., 2011 ; (VLID)216663
During the last ten years, Estonia has made strong efforts in terms of the transition to a market economy. This is particularly true with respect to the soundness and transparency of monetary and fiscal policies, the privatisation of former state-owned enterprises, the development of the financial sector and the institutional setting. This paper argues that strengthening the formal institutional setting, and in particular the corporate governance institutions, is crucial to further enhance the process of economic transition of the country. It describes the current state the corporate governance structures as compared to other countries in Central and Eastern. ; In den letzten 10 Jahren hat Estland viele Anstrengungen in der Umwandlung in eine Marktwirtschaft unternommen. Dies trifft insbesondere auf die Stabilität und Transparenz der Währungs- und Finanzpolitik zu, der Privatisierung ehemaliger Staatsbetriebe, die Entwicklung im Finanzsektor und im institutionellen Umfeld. Der Aufsatz zeigt auf, dass die Stärkung des formellen institutionellen Umfeldes und im einzelnen auch die der Bereiche der Unternehmensorganisation essentiell wichtig für den weiteren Tranformationsprozess des Landes sind. Er stellt den heutigen Stand der Unternehmensstrukturen im Vergleich zu anderen Staaten dar.
Dieser Dieser Beitrag stellt zur Diskussion, welchen Beitrag die Compliance im Rahmen der Corporate Governance-Forschung einnehmen kann, wie sich diese Einordnung aus einer öko-nomischen Sichtweise heraus begründen lässt und welche Auswirkungen zu erwarten sind. Mag auf den ersten Blick der Begriff der Compliance tatsächlich wie ein alter Wein in neuen Schläuchen erscheinen, zeigt sich bei genauerer Betrachtung dass Compliance-Mechanismen und Maßnahmen im Rahmen der Corporate Governance Forschung einen begründeten Beitrag leisten, der über existierende Mechanismen - wie das Rechtssystem - hinausreicht. Die vorliegende Analyse soll dazu beitragen, eine fundierte Begründung für die Etablierung von Compliance-Maßnahmen zu liefern. Der Beitrag setzt dort an, wo bisherige Maßnahmen nicht oder nur unzureichend greifen: auf der Ebene der Unternehmensleitung.Beitrag stellt zur Diskussion, welchen Beitrag die Compliance im Rahmen der Corporate Governance-Forschung einnehmen kann, wie sich diese Einordnung aus einer ökonomischen Sichtweise heraus begründen lässt und welche Auswirkungen zu erwarten sind. Mag auf den ersten Blick der Begriff der Compliance tatsächlich wie ein alter Wein in neuen Schläuchen erscheinen, zeigt sich bei genauerer Betrachtung dass Compliance-Mechanismen und Maßnahmen im Rahmen der Corporate Governance Forschung einen begründeten Beitrag leisten, der über existierende Mechanismen - wie das Rechtssystem - hinausreicht. Die vorliegende Analyse soll dazu beitragen, eine fundierte Begründung für die Etablierung von Compliance-Maßnahmen zu liefern. Der Beitrag setzt dort an, wo bisherige Maßnahmen nicht oder nur unzureichend greifen: auf der Ebene der Unternehmensleitung.
The literature shows that good corporate governance generally pays for firms, for markets, and for countries. It is associated with a lower cost of capital, higher returns on equity, greater efficiency, and more favorable treatment of all stakeholders, although the direction of causality is not always clear. The law and finance literature has documented the important role of institutions aimed at contractual and legal enforcement, including corporate governance, across countries. Using firm level data, researchers have documented relationships between countries corporate governance frameworks on the one hand and performance, valuation, the cost of capital, and access to external financing on the other. Given the benefits of good corporate governance, firms and countries should voluntarily reform more. Resistance by entrenched owners and managers at the firm level and political economy factors at the level of markets and countries partly explain why they do not.
Using a qualitative methodology (interviews), we examine the relationship between the effectiveness of corporate governance mechanisms and elitist interventions. In doing this, we identify three elitist groups – political, cultural and religious, and investigate how they shape the legitimacy and effectiveness (or otherwise) of the institutional drivers of corporate governance in Nigeria. We caution the widely-held notion in the literature which suggests that institutions act as a check on the behaviour of elites and influence how elites compete and emerge. Alternatively, we argue that elites, in the presence of institutional voids, can invent, circumvent and corrupt institutions.
Ohne gute Reputation und das daraus resultierende Vertrauen können private Banken nicht funktionieren. Dies war historisch schon immer so und ist insbesondere bei einlagensammelnden Banken geschäftsmodellimmanent. Heute gilt zudem, dass der Ausfall eines größeren Systemmitglieds geeignet ist, eine Krise des gesamten Finanzsystems auszulösen. Der Artikel zeigt, dass Good Corporate Governance eine der entscheidendsten Stellhebel für gute Reputation ist. Dabei sind einerseits Institutionen und Regeln relevant. Andererseits - und mindestens ebenso wichtig – geht es um Werte und um Haltung. Dieser Beitrag beschäftigt sich nach einem kurzen historischen Abriss mit der Frage, welche Rolle eine Governanceethik in und für Banken spielt und welchen Beitrag sie für die Wiedergewinnung von Akzeptanz in der Gesellschaft, Wirtschaft und Politik leisten kann. Der Stellenwert dieses Themas für die Zukunftsfähigkeit des Bankensystems kann nicht hoch genug eingeschätzt werden.
Classification JEL: M14 ; This dissertation analyzes the corporate governance of Chinese public hospitals under the reform of the current health care system. Public hospital reform is the main part of the comprehensively deepening health care reform in People's Republic of China. In the literature review we carry out the study articles written by Chinese scholars on public hospital corporate governance and analyze the relationship between public hospital, government, and other "stakeholders" by using the principal-agent theory, the theory of "separation of ownership", the theory of "stakeholder", and the theory of "New Public Management". We also present the governance structures of hospitals in the United States, the United Kingdom, and Singapore. This presentation allows us to make comparisons with those in China. The main part of this dissertation is to examine the organizational reform of the governance of Chinese public hospitals, giving the example of Dongyang people's hospital in Zhejiang province. In the final part, the author of this dissertation makes some recommendations in order to contribute to improving the governance of public hospitals in China ; Esta dissertação analisa a governabilidade dos hospitais públicos Chineses no âmbito da reforma do sistema de saúde em curso. Os hospitais públicos constituem a parte principal do sistema de médico da República Popular da China. Na revisão de literatura efetuamos o estudo de artigos escritos por autores chineses sobre governabilidade organizacional dos hospitais chineses e analisamos a relação entre os hospitais públicos, o governo e outros "stakeholders" utilizando a teoria do principal-agente, a teoria dos "stakeholders" e a teoria da "Nova Gestão Pública". Apresentamos também os modelos de governação dos hospitais nos Estados Unidos da América, no Reino Unido e em Singapura. Esta apresentação permite-nos fazer comparações com a República Popular da China. A parte principal desta dissertação consiste em analisar a reforma da governabilidade organizacional dos hospitais chineses, dando o exemplo do Hospital de Dongyang da província de Zhejiang. Na parte final o autor desta dissertação faz algumas recomendações, no sentido de contribuir para a melhoria da governabilidade dos hospitais públicos chineses.
This report summarizes the experiences of 19 companies from across the region. Each of the case studies highlights the key corporate governance changes made and the positive impacts that resulted, as reported by the company. The companies represent various countries, sectors, types, and sizes. All of the companies featured are former IFC Advisory Services clients. Some are IFC Investment clients as well. IFC conducted an in-depth corporate governance assessment for each of these companies using IFC's Corporate Governance Methodology. The assessments resulted in specific recommendations on ways to improve each company's governance framework and identified implementation plans. The assessments were conducted at various points over the past few years. The time taken to implement changes and realize benefits varied. However, all companies reported that governance changes are continuous and the corresponding benefits manifest themselves in different forms over time. This report provides examples of companies in various stages of change – from recent changes (e.g., Medgulf) to ongoing, longer-term changes (e.g., Bank Audi). This report also includes testimony from three MENA private equity firms (all IFC investment clients). Collectively, these firms have worked with 72 investee companies (past and present funds). Selected based on their association with IFC and their willingness to share their insight and experiences, these firms offer a valuable window into the importance of corporate governance from an investor's perspective. The material in this report is based on feedback gathered through individual interviews with each organization featured, resulting in well-considered responses. The achievements highlighted are all the more notable given that the interviews and information gathering process took place in in late 2009 (first edition) and 2013 (for current edition), when the region was still under the stress of the crisis.
